Litigation Release No. 19638 / April 4, 2006

SEC Files Emergency Enforcement Action Against Eric M. Westbury and Three Companies He Controls to Stop On-Going Fraud and Other Federal Securities Law Violations

Commission Seeks Appointment of a Receiver, an Asset Freeze and Other Relief to Protect Investor Funds and to Ensure the Equitable Distribution of Assets Among Injured Investors

The Securities and Exchange Commission ("Commission") today filed an emergency civil action in the United States District Court for the District of Maryland (Greenbelt Division) to stop Eric M. Westbury ("Westbury") of Silver Spring, Maryland, and three companies that Westbury owns or controls, from continuing to engage in anti-fraud and other federal securities law violations against investors in those entities. The Commission's complaint alleges that Westbury is at the center of two on-going, related frauds; the first involves a fraud on investors in SBM Certificate Company ("SBM") and SBM Investment Certificates, Inc. formerly known as 1st Atlantic Guaranty Corp. ("1st Atlantic"); and the second involves a fraud on the District of Columbia Department of Banking and Financial Institutions/Credit Enhancement Fund (the "District"), an investor in and client of Geneva Capital Partners, LLC ("Geneva"). Westbury is the Chairman of the Board, Chief Executive Officer and President of SBM and of 1st Atlantic, and 100% owner of Geneva. SBM and 1st Atlantic are headquartered and doing business in Bethesda, Maryland, and Geneva is headquartered and doing business in Silver Spring, Maryland.

The Commission's complaint alleges that SBM and 1st Atlantic issued "face amount certificates" totaling approximately $33 million, to over 2,000 investors, most of whom are individuals whose certificates represent investments of less than $10,000. A face-amount certificate company is a specialized type of investment company that issues fixed-income debt securities, agreeing to pay the principal amount of the instruments plus accrued interest on maturity. For the protection of investors, face amount certificate companies are required, among other things, to maintain at all times minimum certificate reserves on all of their outstanding face-amount certificates in an aggregate amount sufficient to ensure that their liabilities are at least equal to their outstanding face-amount certificates.

The Commission's complaint alleges that since approximately January 2003, 1st Atlantic and SBM have failed to maintain the statutorily required minimum reserves in cash or qualified investments on their outstanding face-amount certificates. In fact, the complaint alleges, certain of the assets that SBM has represented comprise its reserves are fictional. As a result, if investors attempt to redeem their investments in the normal course, neither SBM nor 1st Atlantic will have adequate reserves to pay back all of their invested capital. Although neither 1st Atlantic nor SBM is offering face-amount certificates to new investors, both companies are permitting existing investors to "roll-over" their invested capital, without disclosing the foregoing information or its impact on the nature and quality of their investment.

The Commission's complaint further alleges a separate but related ongoing fraud at Geneva. Based on material misrepresentations and omissions, and without being apprised of serious conflicts of interest, the District invested with Westbury and Geneva over $21 million of District of Columbia and federal funds earmarked for the D.C. charter school Credit Enhancement Fund. The Credit Enhancement Fund program provides loans and guaranties to charter schools to improve their creditworthiness so that commercial financial institutions will be more willing to make loans to, and/or participate in bond issues for, the particular charter school's capital improvements. Rather than invest the funds in accordance with the terms of the offering documentation, the Commission's complaint alleges that Westbury and Geneva "invested" almost all of the money in Westbury-related and controlled companies. In an effort to conceal their fraud, Westbury and Geneva have continued to make material misrepresentations and omissions, in account statements and other documentation, provided to the District. While the District has received $10 million of the funds it initially invested back from Geneva, and used those funds to extend loans to District charter schools, the Commission's complaint alleges that the District has demanded the balance of its investment from Geneva and Westbury but Geneva and Westbury have been unable to comply with that request.

The Commission's complaint charges defendants 1st Atlantic and SBM with violating Sections 28(a) and 28(b) of the Investment Company Act of 1940. In addition, the Commission's complaint charges 1st Atlantic, SBM, Westbury and Geneva with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. The Commission's complaint also charges Westbury and Geneva with violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

The Commission is seeking a temporary restraining order and preliminary injunction enjoining each of the defendants from engaging in the violations set forth above; and an order appointing a receiver for and freezing the assets of SBM, 1st Atlantic, and Geneva; granting expedited discovery; prohibiting the alteration or destruction of documents; and requiring an accounting from the defendants. In addition to the emergency relief obtained, the Commission's complaint seeks permanent injunctive relief, as well as disgorgement and prejudgment interest, from each defendant, and civil penalties from defendants Westbury and Geneva.